To receive a verbal update from Stuart Horton, Strategic Housing Manager.

The Chairman welcomed Stuart Horton, Strategic Housing Manager for the South & East Lincolnshire Councils Partnership(Accessible Homes, Housing Enabling and Housing Strategy) who was in attendance to provide Members with a brief overview on Affordable Housing.  The information provided was correct as of 30 November 2023.

• There were 1850 households on the East Lindsey Housing Register, the number down from previous years;

• Housing delivery completions – Work was progressing to try and refine these figures as there was a period of time where there was very little resource to keep the records up to date.  Resource was back in place and work was underway to pin down all of the figures and completions information.  Initial data indicated that over the last 3 to 4 years, completions were just over 100 a year on average.  For 2023/24 the total forecast was also just over 100, however this number may increase if there were further completions;

• It was anticipated that 2024/25 would see 160 completions due to a couple of all affordable housing schemes that had commenced, one of which was in Louth delivering 147 affordable units;

• Authorities had put funding in to deliver more one-bedroom properties for which there was a high demand, and it was hoped that a press release would be released regarding this in the near future;

• A number of community-led housing schemes were being progressed.  The team was looking at one in Tattershall, working with the Co Op and East Midlands Community Led Housing on that scheme.  There was also a scheme in Alford at a very early stage which was currently waiting for the Registered Provider (RP) to come back with further designs.  This would include innovative new affordable housing, modern methods of construction, air/ground source heat pumps, also providing a veteran’s scheme if it could be brought all together.

• There were issues in terms of affordable housing provided by Section 106 agreements at the present time with RPs, with them having a lack of interest in acquiring them which was proving quite challenging.  The Council was progressing a number of routes and was working with RPs to address this, which was mostly a capacity and financial issue.  The RPs were also under pressure to deliver all grant-led schemes and because of the volume of those, these were more cost effective for them rather than acquiring 3 or 4 units at a time when they could progress a scheme of 70 plus units in one go. 

• The Council had received some commuted sum funding from various schemes where it had not been able to deliver the affordable housing on site and was looking at putting in place a scheme to try and encourage RPs to develop all affordable housing sites where the Council needed them and also building the type of properties that were needed.   One-bedroom properties were in high demand, and it was difficult and challenging for RPs to progress schemes with many one-bedroom properties on.  In relation to the Louth scheme being developed, the Council had put a small amount of funding into that scheme so that it could develop more one-bedroom properties than it would have done otherwise.

Members were invited to put their comments and questions forward.

• A Member highlighted the one-bedroom housing need that the Council struggled with and queried whether a way had been found to deal with this on the coastal section, particularly with the flood risk issue.  

The Strategic Housing Manager responded that one-bedroom bungalows would be virtually impossible on the coast, similarly as it was in Boston, however the Council had been delivering on this.  Members were advised that the scheme being developed by ACIS was known as ‘quarter houses’ which was a very popular way of addressing the issue, whereby a house was literally divided in quarters where the downstairs had a kitchen and living space and the bedroom and bathroom were upstairs.  These types of property had proved very popular, particularly with RPs as the tenants have their own front door and a bit of outside space as well.

• A Member referred to the schemes where the Council had collected a commuted sum when it could not find a RP for Section 106 money and highlighted that the commuted sum only lasted a certain amount of time before the Council had to spend it.  Following which, it was queried whether any of this money had ever been lost.

The Strategic Housing Manager responded that no money related to commuted sums had been lost so far, however acknowledged that this had been difficult to manage.   He advised Members that he had recently taken over the management area for these and in terms of time limits, having taken some recent legal advice the time limit for affordable housing commuted housing sums did not apply and that funding could be kept in perpetuity.  He was aware that there has been some confusion and crossovers where time scales for commuted sums had been written into S106 agreements which then had to be abided by.  Positive news was that the Council could keep that funding until it was used to provide additional affordable housing and the funding could be used anywhere within the district.

• A Member queried what amount of money the Council had received in commuted sum payments. 

The Strategic Housing Manager responded that it varied, however was happy to find this information and respond to Committee.  He added that it was quite a significant amount, for example one site was due to pay commuted sums for nearly £1m.  Members were advised that the Council was in the process of developing a scheme following leaving the EU and explained that previously the Council had subsidy control and there used to be state aid and subsidy control legislation in place.  This enabled the Council to put something in place and advise its Registered Providers of this stating this was what the Council would use this funding for, for example one-bedroom properties of housing along the coast.  However, the Council was not giving anyone an advantage but East Lindsey was getting a definite benefit from this.

• The Chairman queried whether there was any ambition or appetite within the authority of making opportunities that may exist through the Partnership to look to deliver housing itself should RPs be unwilling or unable to take up some of the allocations on site. 

The Strategic Housing Manager responded that he was aware that theAssistant Director – Strategic Growth and Development was having those discussions with various people.  The Planning Policy and Research Service Manager advised Members that the Housing Development Manager would be attending Committee early in 2024 who may be able to share information from any discussion ongoing as he was not himself involved in whether the Council was seeking to take this on.

The Strategic Housing Manager added that the only potential discussions ongoing with the Portfolio Holder for Communities and Better Ageing and the Leader of the Council was regarding the current issues with S106 Agreements and the potential for requiring them and highlighted that it was a very large commitment when purchasing properties and then having to manage them.

• A Member queried what the main difficulties with the Section 106 Agreements were considered to be, particularly as developers often tried to renege on these. 

The Strategic Housing Manager explained that there were a lot of factors at play at the present time with S106s.  When researching this, the volume aspect for where RPs considered what to use their capacity on delivering on larger schemes, there was also financial constraints in terms of borrowing as RPs did not get grants for those units and they were purchased at a discounted rate from the developer.  Part of a RP’s commitments were ensuring that its existing stock was up to date, so for some of them this was a major factor as they did not have the financial ability to acquire S106s whilst they were focusing on their existing stock.  There were also issues in some cases with the standards of the S106 being offered because new legislation required the properties to be slightly larger to meet the new national design space standards requirement, or at least a percentage of those.  They were also very keen to have air source or ground source heat pumps in properties but not all developers had switched over to this at the present time.  Therefore, overall there were quite a few factors leading into the issues with S106s, however it was a national issue, and this had been discussed with Homes England and other colleagues.

• A Member agreed with the Chairman and considered that if the Council could provide the housing ‘in-house’ when it struggled to get RPs, even if the housing was not in the same location that could only be a good thing.  In relation to the commuted sum, it was queried whether this had to be at the same cost as what had been agreed for a house or whether this could be negotiated. 

The Strategic Housing Manager explained that normally depending on the type of tenure for that property, for example for an affordable rented property the developer would expect to get 55% to 60% of the open market value of that property from a RP.  For shared ownership, this would be approximately 65% to 70% of the value of that property.  In terms of purchasing the property it would work, but in terms of the commuted sum what the Council would seek from the developer was the difference between that value and the open market value so that it was capturing any uplift in the value of the property the developer would benefit from.  However, there was often negotiation on this depending on the viability of the site and the starting point was on the actual open market value of the property, particularly as build costs had increased but house prices had not.

• A Member queried how many RPs the Council engaged with across the district. 

The Strategic Housing Manager advised Members that there were six, however these all operated at different levels and included Lincs Rural Housing, Platform Housing, Longhurst Housing, ACIS and Ongo.   The Council was currently talking to a lot of RPs and there were also big national and newer investors such as Sage and Halo that the Council was also in discussion with about acquiring affordable properties, however it was stressed that they would need to meet all standards in terms of perpetuity.

No further questions or comments were received.

The Chairman thanked the Strategic Housing Manager for the informative update.

N.B.  Stuart Horton, Strategic Housing Manager left the Meeting at 6.29pm.